B Y - L A W S
of
CP&L ENERGY, INC.
Raleigh, North Carolina
(As Amended And Restated June 15, 2000)
TABLE OF CONTENTS
ARTICLE I
Meetings of Shareholders
Section 1. Place of Meetings...............................................................................1
Section 2. Annual Meetings.................................................................................1
Section 3. Special Meetings................................................................................1
Section 4. Notice of Meetings..............................................................................1
Section 5. List of Shareholders............................................................................2
Section 6. Quorum; Proxies.................................................................................2
Section 7. Voting of Shares................................................................................2
Section 8. Inspectors......................................................................................2
Section 9. Conduct of Meetings.............................................................................3
Section 10. Business Proposed by a Shareholder..............................................................3
Section 11. Nominations by Shareholders.....................................................................4
ARTICLE II
Directors and Meetings of Directors
Section 12. Number and Election of Directors................................................................5
Section 13. Vacancies.......................................................................................6
Section 14. Meetings........................................................................................6
Section 15. Telephone Meetings..............................................................................6
Section 16. Actions Without Meetings........................................................................6
Section 17. General Powers..................................................................................7
Section 18. Committees......................................................................................7
ARTICLE III
Notices
Section 19. Notice Requirements.............................................................................8
Section 20. Waiver of Notice................................................................................9
ARTICLE IV
Officers, Their Authority, and Their Terms of Office
Section 21. Officers of the Corporation.....................................................................9
Section 22. Chief Executive Officer.........................................................................9
Section 23. Removal and Resignation of Officers............................................................10
Section 24. Bond...........................................................................................10
(i)
ARTICLE V
Capital Stock
Section 25. Certificated and Uncertificated Shares.........................................................10
Section 26. Stock Transfer Books and Transfer of Shares....................................................11
Section 27. Holder of Record...............................................................................11
Section 28. Record Date....................................................................................12
Section 29. Lost, Destroyed or Mutilated Certificates......................................................12
Section 30. Transfer Agent and Registrar; Regulations......................................................12
ARTICLE VI
General
Section 31. Distributions..................................................................................13
Section 32. Deeds, Bonds, and Contracts....................................................................13
Section 33. Deposits.......................................................................................13
Section 34. Interpretation.................................................................................13
ARTICLE VII
Indemnity of Officers and Directors
Section 35. Indemnification and Advancement of Expenses....................................................13
ARTICLE VIII
Emergency By-Laws
Section 36. Definitions....................................................................................15
Section 37. Applicability..................................................................................15
Section 38. Board of Directors.............................................................................16
Section 39. Appointment of Officers........................................................................16
Section 40. Amendments.....................................................................................16
(ii)
B Y - L A W S
of
CP&L ENERGY, INC.
Raleigh, North Carolina
(As Amended And Restated June 15, 2000)
ARTICLE I
Meetings of Shareholders
------------------------
Section 1. Place of Meetings.
-----------------
All meetings of the shareholders of CP&L Energy, Inc. (the
"Corporation"), shall be held at such place, either within or without the State
of North Carolina, as may from time to time be fixed by the Board of Directors
of the Corporation (the "Board").
Section 2. Annual Meetings.
---------------
Beginning in the year 2000, the annual meeting of the shareholders of
the Corporation shall be held on the second Wednesday of May in each year, if
not a legal holiday, and if a legal holiday, then on the next day not a legal
holiday, at ten o'clock A.M., or at such other date, or hour, and at such place
as stated in the notice of the meeting as the Board of Directors may determine.
The annual meeting of shareholders for 1999 shall be held on the date and time
specified by the Board of Directors.
Section 3. Special Meetings.
----------------
Special meetings of the shareholders of the Corporation may be held
upon call by a majority of the Board of Directors or of the Executive Committee,
or by the Chairman of the Board, or by the President of the Corporation, at such
time as may be stated in the call and notice.
Section 4. Notice of Meetings.
------------------
Written notice of the time and place of every meeting of shareholders
may be given, and shall be deemed to have been duly given, by mailing the same
at least ten, but not more than
sixty, days prior to the meeting, to each shareholder of record entitled to vote
at such meeting, and addressed to him at his address as it appears on the
records of the Corporation, with postage thereon prepaid. Notice may also be
given by any other lawful means.
Section 5. List of Shareholders.
--------------------
In accordance with Section 55-7-20 of the General Statutes of North
Carolina, the Corporation, or an officer having charge of the record of
shareholders of the Corporation, shall prepare a list of shareholders which
shall be available for inspection by shareholders, or their agents or attorneys.
Section 6. Quorum; Proxies.
---------------
Shares entitled to vote as a separate voting group may take action on a
matter at a meeting only if a quorum of that voting group exists. A majority of
the votes entitled to be cast on the matter by the voting group constitutes a
quorum of the voting group on that matter. Once a share is represented for any
purpose at a meeting, it is deemed present for quorum purposes for the remainder
of the meeting and for any adjournment of that meeting unless a new record date
is or must be set for that adjourned meeting. In the absence of a quorum at the
opening of any meeting of shareholders, the meeting may be adjourned by a
majority of shares voting on a motion to adjourn. Notice of adjournment other
than announcement at the meeting need not be given unless a new record date is
or must be set for that adjourned meeting. At any adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the original meeting.
Section 7. Voting of Shares.
----------------
(a) When a quorum is present at any meeting, the vote of the holders of
a majority of the outstanding stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of any applicable
statute or of the Articles of Incorporation a different vote is required, in
which case such express provision shall govern and control the decision of such
question.
(b) Unless otherwise provided by law or the Articles of Incorporation,
at every meeting of the shareholders each shareholder shall be entitled to one
vote in person or by proxy for each share of such stock held of record by such
shareholder. Except where the transfer books of the Corporation have been closed
or a date has been fixed as a record date for the determination of its
shareholders entitled to vote, no share of stock shall be voted at any election
for directors which has been transferred on the books of the Corporation within
twenty days next preceding such election of directors.
Section 8. Inspectors.
----------
The Board of Directors in advance of any meeting of shareholders may
appoint two voting inspectors to act at any such meeting or adjournment thereof.
If they fail to make such
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appointment, or if their appointees or any of them fail to appear at the meeting
of shareholders, the chairman of the meeting may appoint such inspectors or any
inspector to act at that meeting.
Section 9. Conduct of Meetings.
-------------------
Meetings of the shareholders shall be presided over by the Chairman of
the Board of Directors, or, if he is not present, the President, or, if the
President is not present, a Vice President, or if neither of said officers is
present, by a chairman pro tem to be elected at the meeting. The Secretary of
the Corporation shall act as secretary of such meetings, if present, but if not
present, some person shall be appointed by the presiding officer to act during
the meeting. The officer of the Corporation presiding over the meeting of
shareholders shall have all the powers and authority vested in presiding
officers by law or practice, without restriction, as well as the authority to
conduct an orderly meeting and to impose reasonable limits on the amount of time
taken up in remarks by any one shareholder.
Section 10. Business Proposed by a Shareholder.
----------------------------------
To be properly brought before a meeting of shareholders, business must
be (i) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (ii) otherwise properly brought
before the meeting by or at the direction of the Board of Directors or (iii)
otherwise properly brought before an annual meeting by a shareholder of the
Corporation who was a shareholder of record at the time of the giving of notice
provided for in Section 4 of these By-Laws and who is entitled to vote at the
meeting. In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a shareholder, the shareholder must
give timely notice of the proposal in writing to the Secretary of the
Corporation. To be timely, a shareholder's notice must be received by the
Secretary of the Corporation at the principal executive offices of the
Corporation not later than the close of business on the 60th day prior to the
first anniversary of the immediately preceding year's annual meeting; provided,
however, that with respect to the annual meeting to be held in 2000, a
shareholder's notice must be received by the Secretary of the Corporation at the
principal executive offices of the Corporation no later than December 3, 1999.
In no event shall the public announcement of an adjournment or postponement of
an annual meeting or the fact that an annual meeting is held after the
anniversary of the preceding annual meeting commence a new time period for the
giving of a shareholder notice as described above. A shareholder's notice shall
set forth as to each matter the shareholder proposes to bring before the meeting
(i) a brief description of the business desired to be brought before the annual
meeting, including the complete text of any resolutions to be presented at the
annual meeting with respect to such business, (ii) the reasons for conducting
such business at the annual meeting, (iii) the name and address of record of the
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made, (iv) the class and number of shares of the Corporation which are owned by
the shareholder and such beneficial owner, (v) a representation that the
shareholder is a holder of record of shares of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
propose such business, and (vi) any material interest of the shareholder and
such beneficial owner in such business.
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In the event that a shareholder attempts to bring business before a
meeting without complying with the procedures set forth in this Section 10, such
business shall not be transacted at such meeting. The Chairman of the Board of
Directors, or any other individual presiding over the meeting pursuant to
Section 9 of these By-Laws, shall have the power and duty to determine whether
any proposal to bring business before the meeting was made in accordance with
the procedures set forth in this Section 10, and, if any business is not
proposed in compliance with this Section, to declare that such defective
proposal shall be disregarded and that such proposed business shall not be
transacted at such meeting.
Section 11. Nominations by Shareholders.
---------------------------
Subject to the rights of holders of any securities or obligations of
the Corporation conferring special rights regarding election of directors,
nominations for the election of directors shall be made by the Board of
Directors or by any shareholder entitled to vote in elections of directors;
provided however, that any shareholder entitled to vote in the election of
directors may nominate one or more persons for election as directors only at an
annual meeting and if written notice of such shareholder's intent to make such
nomination or nominations has been received, either by personal delivery or by
United States registered or certified mail, postage prepaid, by the Secretary of
the Corporation at the principal executive offices of the Corporation not later
than the close of business on the 60th day prior to the first anniversary of the
immediately preceding year's annual meeting; provided, however, that with
respect to the annual meeting to be held in 2000, a shareholder's notice must be
received by the Secretary of the Corporation at the principal executive offices
of the Corporation no later than December 3, 1999. In no event shall the public
announcement of an adjournment or postponement of an annual meeting or the fact
that an annual meeting is held after the anniversary of the preceding annual
meeting commence a new time period for the giving of a shareholder's notice as
described above. Each notice shall set forth (i) the name and address of record
of the shareholder who intends to make the nomination, the beneficial owner, if
any, on whose behalf the nomination is made and of the person or persons to be
nominated, (ii) the class and number of shares of the Corporation that are owned
by the shareholder and such beneficial owner, (iii) a representation that the
shareholder is a holder of record of shares of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice, (iv) a description of
all arrangements, understandings or relationships between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder, and (v) such other information regarding each nominee proposed by
such shareholder as would be required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise
required to be disclosed, pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors, and shall include a consent signed by each
such nominee to serve as a director of the Corporation if so elected. In the
event that a shareholder attempts to nominate any person without complying with
the procedures set forth in this Section 11, such person shall not be nominated
and shall not stand for election at such meeting. The Chairman of the Board of
Directors, or any other individual presiding over the meeting pursuant to
Section 9 of these By-Laws, shall have the power and duty to determine whether a
nomination proposed to be brought before the meeting was made in accordance with
the procedures set forth in this
4
Section 11 and, if any proposed nomination is not in compliance with this
Section 11, to declare that such defective proposal shall be disregarded.
ARTICLE II
----------
Directors and Meetings of Directors
-----------------------------------
Section 12. Number and Election of Directors.
--------------------------------
(a) The number of directors of the Corporation shall not be less than
eleven (11) nor more than fifteen (15). The authorized number of directors,
within the limits above specified, shall be determined by the affirmative vote
of a majority of the whole board given at any regular or special meeting of the
Board of Directors, provided that, the number of directors shall not be reduced
to a number less than the number of directors then in office unless such
reduction shall become effective only at and after the next ensuing meeting of
the shareholders for the election of directors.
(b) The directors shall appoint from among their number a Chairman, who
shall serve at the pleasure of the Board. Members of the Board of Directors of
the Corporation who are full-time employees of the Corporation shall retire from
the Board upon their retirement from employment or upon attaining the age of 65
years, whichever occurs first; provided, however, that the Chairman of the
Board, if then a full-time employee of the Corporation, shall be eligible to
continue as a member of the Board until the first Annual Meeting of Shareholders
occurring at least one year after retirement from employment or after attaining
the age of 65 years, whichever occurs first, if so requested to remain by the
Board. Those persons who are not employed full-time by the Corporation shall not
be eligible for election as a Director in any calendar year (or subsequent year)
in which he or she has reached or will reach the age of 71 years, unless
requested by the Chairman of the Board and approved on an annual basis by the
full Board. Otherwise, any Director who reaches the age of 71 during a term of
office shall resign as of the first day of the month so following unless
otherwise determined by the Board.
(c) Except for the election of the initial directors whose terms are
classified pursuant to this By-Law, the election of directors shall be held at
the annual meeting of shareholders. The directors, other than those who may be
elected under circumstances specified in the Articles of Incorporation by the
holders of any class of stock having a preference over the Common Stock as to
dividends or in liquidation, shall be classified into three classes, Class I,
Class II and Class III, as nearly equal in number as possible. The directors of
Class I shall originally be elected for a term expiring at the annual meeting of
shareholders of the Corporation to be held in 2002; the directors of Class II
shall originally be elected for a term expiring at the annual meeting of
shareholders of the Corporation to be held in 2000; and the directors of Class
III shall originally be elected for a term expiring at the annual meeting of
shareholders of the Corporation to be held in 2001. The directors of each class
shall hold office until their respective successors are elected and qualified,
or until their earlier resignation or removal. At each annual meeting of
shareholders of the Corporation beginning in 2000, the successors to the class
of directors whose term expires at such meeting shall be identified as being of
the same class of directors they succeed and shall be elected to hold office for
a term expiring at the third succeeding annual meeting of shareholders. When the
number of directors is changed, any newly-created
5
directorships or any decrease in directorships shall be so apportioned among the
classes by the Board of Directors as to make all classes as nearly equal in
number as possible; provided, however, that no decrease in the number of
directors shall shorten or terminate the term of any incumbent director.
Section 13. Vacancies.
---------
Subject to contrary provisions in the Articles of Incorporation or
elsewhere in these By-Laws, in case of any vacancy in the number of directors
through death, resignation, disqualification, increase in the number of
directors or other cause, the remaining directors present at the meeting, by
affirmative vote of a majority thereof, though less than a quorum, may elect a
successor to hold office until the next shareholders' meeting at which directors
are elected and until the election of his successor.
Section 14. Meetings.
--------
Regular meetings of the Board of Directors shall be held at times fixed
by resolution of the Board, and special meetings may be held upon the written
call of the Executive Committee, or by the Chairman of the Board, or by the
President or by any two directors; and the Secretary or officer performing his
duties shall give reasonable notice of all meetings of directors; provided, that
a meeting may be held without notice immediately after the annual election, and
notice need not be given of regular meetings held at times fixed by resolution
of the Board. Meetings may be held at any time without notice if all the
directors are present, or if those not present waive notice either before or
after the meeting. All regular and special meetings shall be held at the
principal offices of the Corporation, provided that the Board, from time to
time, may order that any meeting be held elsewhere within or without the State
of North Carolina. A majority of the whole Board of Directors shall constitute a
quorum, and the act of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors, unless a greater
proportion is required by the Articles of Incorporation.
Section 15. Telephone Meetings.
------------------
Members of the Board or any committee may participate in a meeting of
the Board or such committee by means of a conference telephone or other means of
communications whereby all directors participating may simultaneously hear each
other during the meeting, and participation by such means shall constitute
presence in person at such meeting.
Section 16. Actions Without Meetings.
------------------------
Any action that may be taken at a meeting of the Board or of a
committee may be taken without a meeting if a consent in writing, setting forth
the action, shall be signed, either before or after such action, by all of the
directors or all of the members of the committee, as the case may be. Such
consent shall have the same force and effect as a unanimous vote.
6
Section 17. General Powers.
--------------
The business and affairs of the Corporation shall be managed by its
Board of Directors, which may exercise all such powers of the Corporation and do
all such lawful acts and things which are not by law or by the Articles of
Incorporation directed or required to be exercised or done by the shareholders;
provided, however, that the officers of the Corporation shall, without prior
action of the Board of Directors, perform all acts and things incidental to the
usual and ordinary course of the business in which the Corporation is engaged as
hereinafter provided by the By-Laws or as may hereafter be delegated by the
Board of Directors.
Section 18. Committees.
----------
(a) A majority of the Board of Directors may create one or more
committees and appoint other members of the Board of Directors to serve on such
Committees. Each such committee shall have two or more members, who serve at the
pleasure of the Board of Directors. Any such committee may exercise authority
over any matters except those matters described in Section 55-8-25(e) of the
General Statutes of North Carolina. Each committee may make rules for the
conduct of its business. A majority of the members of such committee shall
constitute a quorum.
(b) A majority of the whole Board of Directors, present at any meeting
held after their election in each year, may appoint an Executive Committee, to
consist of three or more directors, which Committee shall have and may exercise,
during the intervals between meetings of the Board, by a majority vote of those
present at a meeting, all the powers vested in the Board, except the following
matters as more fully described in Section 55-8-25(e) of the General Statutes of
North Carolina:
- Authorize distributions;
- Approve or propose to shareholders action that is by law required to
be approved by the shareholders;
- Fill vacancies on the Board of Directors or on any of its Committees;
- Amend the Corporation's Articles of Incorporation pursuant to
N.C.G.S. ss.55-10-02;
- Adopt, amend or repeal the Corporation's By-Laws;
- Approve a plan of merger not requiring shareholder approval;
- Authorize or approve reacquisition of shares, except according to a
formula or method prescribed by the Board of Directors; or
- Authorize or approve the issuance or sale or contract for sale of
shares, or determine the designation and relative rights,
preferences, and limitations of a class or series of shares, except
that the Board of Directors may authorize a committee (or a senior
executive officer of the Corporation) to do so within limits
specifically prescribed by the Board of Directors.
(c) A majority of the whole Board of Directors present at any meeting
shall have the power at any time to change the membership of such committee and
to fill vacancies in it. The Chairman of the Executive Committee shall be
appointed by the Board of Directors from the membership of the Executive
Committee.
7
ARTICLE III
-----------
Notices
-------
Section 19. Notice Requirements.
-------------------
(a) Notice may be communicated: in person; by telephone, telegraph,
teletype, or other form of wire or wireless communication, by facsimile
transmission; or by mail or private carrier. If these forms of personal notice
are impracticable as to one or more persons, notice may be communicated to such
persons by publishing notice in a newspaper in the county wherein the
Corporation has its principal place of business in North Carolina, or if it has
no principal place of business in North Carolina, the county wherein it has its
registered office in North Carolina; or by radio, television, or other form of
public broadcast communication.
(b) Written notice is effective at the earliest of the following:
(i) When received;
(ii) Five days after its deposit in the United States
mail, as evidenced by the postmark or based on the
affidavit of the person depositing the notice, if
mailed with postage thereon prepaid and correctly
addressed;
(iii) On the date shown on the return receipt, if sent by
registered or certified mail, return receipt
requested, signed by or on behalf of the addressee.
Anyone accepting the mail at the stated address and
signing the receipt shall be conclusively presumed to
have acted on behalf of the addressee.
(c) Oral notice is effective when actually communicated to the person
to whom given.
(d) If these By-Laws prescribe notice requirements for particular
circumstances, those requirements govern.
(e) No notice need be given any shareholder or director whose address
is outside of the United States and each shareholder located outside of the
United States must provide to the Corporation a mailing address in the United
States to which notices from the Corporation may be addressed. The Corporation
shall not be obligated to recognize any such address (or change of address)
received less than thirty days before the date on which the Corporation's notice
is sent. Any notice given by telegram or cable shall be deemed to be given when
delivered to and accepted for transmittal by an office of the transmitting
corporation.
8
Section 20. Waiver of Notice.
----------------
Whenever any notice is required to be given under the provisions of
applicable statutes or of the Articles of Incorporation or of these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice in apt time.
ARTICLE IV
Officers, Their Authority, and Their Terms of Office
----------------------------------------------------
Section 21. Officers of the Corporation.
---------------------------
The Board of Directors shall annually at its first meeting held after
the annual meeting of shareholders, or as soon thereafter as may be practical,
elect the officers of the Corporation, who shall consist of a President, one or
more Senior Executive Vice Presidents and Executive Vice Presidents, two or more
Senior Vice Presidents, three or more Vice Presidents, a Secretary, a Treasurer,
a Controller and such other officers or assistant officers and agents as may be
appointed by the Board of Directors. At other times, the Board of Directors or
any Committee to which it delegates the authority to do so may elect officers to
fill any new office or a vacancy in any office occurring by virtue of the
incumbent's death, resignation, removal or otherwise at any duly convened
meeting of the Board or of the Committee. The officer shall serve for the period
specified or until a successor is chosen. From time to time the Board of
Directors may also elect a Vice Chairman who shall have such duties as described
herein and as may from time to time be directed. Any two offices may be held by
the same person, but no officer may act in more than one capacity where action
of two or more officers is required. The Vice Chairman, if any, of the Board of
Directors shall be chosen from among the Directors, but the other officers need
not be directors of the Corporation.
Section 22. Chief Executive Officer.
-----------------------
(a) The Board of Directors shall appoint the Chief Executive Officer,
who shall be either the Chairman, the Vice Chairman or the President of the
Corporation. In the event the Chief Executive Officer is unavailable at the time
for needed action, or in other circumstances as directed by the Chief Executive
Officer, then the Chairman, the Vice Chairman, if any, or the President if there
is no Vice Chairman, who is not then serving as Chief Executive Officer, shall
be the next officer in line of authority to perform the duties of Chief
Executive Officer. If the Chairman, the Vice Chairman and the President should
be unavailable at the time for needed action, or in other circumstances as
directed by the Chief Executive Officer, then the next officer in line of
authority to perform the duties of the Chief Executive Officer shall be a Senior
Executive Vice President or Executive Vice President as designated by the Chief
Executive Officer.
(b) Unless otherwise provided by the Board of Directors, the
Corporation's Chief Executive Officer is vested with full power, authority, and
the duty, to perform in person, and by delegation of authority to subordinate
officers and employees of the Corporation, all acts and things deemed by him to
be reasonably necessary or desirable to direct, handle, and manage, and
9
in general carry on the Corporation's business transactions authorized by its
Articles of Incorporation, in respect to all matters except those which by law
must be performed by the directors.
Section 23. Removal and Resignation of Officers.
-----------------------------------
Any officer may be reassigned duties by appropriate members of senior
management at any time. Any officer may be removed from office at any time by
the Board of Directors, or by any Committee to which it delegates the authority
to remove officers from office, without prejudice to the rights of the officer
removed under an employment agreement in writing previously duly authorized by
the Board of Directors or the Executive Committee of the Board of Directors. Any
officer may resign at any time by giving written notice to the Board of
Directors, the President or any other officer of the Corporation. Such
resignation shall take effect at the time specified therein, and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 24. Bond.
----
The Board of Directors or the Chief Executive Officer of the
Corporation may require the Treasurer and any other officer, employee or agent
of the Corporation to give bond, in such sum and with such surety or sureties as
either shall determine, for the faithful discharge of their duties.
ARTICLE V
---------
Capital Stock
-------------
Section 25. Certificated and Uncertificated Shares.
--------------------------------------
(a) The Board of Directors may authorize the issuance of some or all of
the shares of the Corporation's classes or series of capital stock without
issuing certificates to represent such shares. If shares are represented by
certificates, the certificates shall be in such form as required by law and as
determined by the Board of Directors. Certificates shall be signed by the
Chairman of the Board or the President and by the Secretary or Treasurer. The
signatures of any such officers upon a certificate may be facsimiles or may be
engraved or printed or omitted if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the Corporation itself or an
employee of the Corporation. If an officer who has signed or whose facsimile or
other signature has been placed upon a certificate ceases to hold the office
before the certificate is issued, the certificate may be issued by the
Corporation with the same effect as if he held the office on the date of
issuance.
(b) All certificates for shares shall be consecutively numbered (within
class or series designations, if desired) or otherwise identified and entered
into the stock transfer records of the Corporation. When shares are represented
by certificates, the Corporation shall issue and deliver to each shareholder to
whom such shares have been issued or transferred certificates representing the
shares owned of record by him. Upon a transfer of certificated shares, a new
certificate shall
10
be issued only upon surrender of a certificate representing such shares for
cancellation, subject to the provisions for issuance of a new certificate set
forth in Section 26 of these By-Laws. When shares are not represented by
certificates, then within a reasonable time after the issuance or transfer of
such shares, the Corporation shall send the shareholder to whom such shares have
been issued or transferred a written statement of the information required by
law to be on certificates.
(c) If uncertificated shares are issued, the Corporation shall send
each holder of such shares a written statement containing the information
required by law.
(d) Transfer agents or registrars, or both, for one or more classes of
the stock of the Corporation may be appointed by the Board of Directors and may
be required to countersign certificates representing shares of such class or
classes.
Section 26. Stock Transfer Books and Transfer of Shares.
-------------------------------------------
The Corporation or its designated transfer agent or other agent, shall
keep a book or set of books to be known as the stock transfer books of the
Corporation, containing the name of each shareholder of record, together with
such shareholder's address and the number and class or series of shares held by
such shareholder. Shares of stock of the Corporation shall be transferable on
the stock books of the Corporation by the holder in person or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary or the transfer agent, but, except as hereinafter provided in the case
of loss, destruction or mutilation of certificates, no transfer of stock shall
be entered until the previous certificate, if any, given for the same shall have
been surrendered and canceled. Transfer of shares of the Corporation represented
by certificates shall be made on the stock transfer books of the Corporation
only upon surrender of the certificates for the shares sought to be transferred
by the holder of record thereof or by such holder's duly authorized agent,
transferee or legal representative, who shall furnish proper evidence of
authority to transfer with the Secretary of the Corporation or its designated
transfer agent or other agent. All certificates surrendered for transfer shall
be canceled before new certificates for the transferred shares shall be issued.
Except as otherwise provided by law, no transfer of shares shall be valid as
against the Corporation, its shareholders or creditors, for any purpose, until
it shall have been entered in the stock records of the Corporation by an entry
showing from and to whom transferred.
Section 27. Holder of Record.
----------------
Except as otherwise required by the NCBCA, the Corporation may treat
the person in whose name shares of stock of the Corporation (whether or not
represented by a certificate) stand of record on its books or the books of any
transfer agent or other agent designated by the Board of Directors as the
absolute owner of the shares and the person exclusively entitled to receive
notification and distributions, to vote, and otherwise to exercise the rights,
powers and privileges of ownership of such shares. The Corporation may assume
that the holder of record had full competency, capacity and authority to
exercise all rights of ownership, irrespective of any knowledge or notice to the
contrary or any description indicating a representative, pledge or other
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fiduciary relation or any reference to any other instrument or to the rights of
any other person appearing upon the records of the Corporation or upon the share
certificate.
Section 28. Record Date.
-----------
For the purpose of determining shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board may fix in advance a date
as the record date for any such determination of shareholders, such date in any
case to be not more than seventy days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall apply to any
adjournment thereof unless the Board fixes a new record date, which it shall do
if the meeting is adjourned to a date more than 120 days after the date fixed
for the original meeting.
Section 29. Lost, Destroyed or Mutilated Certificates.
-----------------------------------------
In case of loss, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, destruction or
mutilation and upon the giving of a bond of indemnity to the Corporation in such
form and in such sum as the Board may direct, provided that a new certificate
may be issued without requiring any bond when, in the judgment of the Board, it
is proper so to do. The Board of Directors may delegate to the Corporation's
Transfer Agent and Registrar authority to issue and register, respectively, from
time to time without further action or approval of the Board of Directors, new
certificates of stock to replace certificates reported lost, stolen or destroyed
upon receipt of an affidavit of loss and bond of indemnity in form and amount
and with corporate surety satisfactory to them in each instance protecting the
Corporation and them against loss. Such legal evidence of such loss or theft or
destruction shall be furnished to the Board of Directors as may be required by
them.
Section 30. Transfer Agent and Registrar; Regulations.
-----------------------------------------
The Corporation may, if and whenever the Board of Directors so
determines, maintain in the State of North Carolina or any other state of the
United States, one or more transfer offices or agencies and also one or more
registry offices which offices and agencies may establish rules and regulations
for the issue, transfer and registration of certificates. No certificates for
shares of stock of the Corporation in respect of which a transfer agent and
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and registered by such registrar. The Board of Directors may also
make such additional rules and regulations as it may deem expedient concerning
the issue, transfer and registration of shares represented by certificates and
shares without certificates.
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ARTICLE VI
General
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Section 31. Distributions.
-------------
Subject to the provisions of the applicable statutes and the Articles
of Incorporation of the Corporation, dividends, either cash or stock, upon the
capital stock of the Corporation may be declared by the Board of Directors at
any meeting thereof.
Section 32. Deeds, Bonds, and Contracts.
---------------------------
Deeds, bonds, notes, mortgages and contracts of the Corporation may be
executed on behalf of the Corporation by the President, a Senior Executive Vice
President, an Executive Vice President, or a Vice President, or any one of such
other persons as shall from time to time be authorized by the Board of
Directors, and when necessary or appropriate may be attested or countersigned by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer. The corporate seal of the Corporation may be affixed to deeds, bonds,
notes, mortgages, contracts or stock certificates by an appropriate officer of
the Corporation by impression thereon, or, by order of an appropriate officer of
the Corporation, a facsimile of said seal may be affixed thereto by engraving,
printing, lithograph or other method.
Section 33. Deposits.
--------
The monies of the Corporation shall be deposited in the name of the
Corporation in such bank or banks or trust Corporation or trust companies as the
Treasurer, with approval of the Chief Executive Officer, shall from time to time
select, and shall be drawn out only by checks or other orders signed by persons
designated by resolution by the Board of Directors.
Section 34. Interpretation.
--------------
As and when used in any of the foregoing By-Laws the words
"stockholder" and "stockholders" shall be deemed and held to be synonymous with
the words "shareholder" and "shareholders," and the word "stock" shall be deemed
and held to be synonymous with the words "share" or "shares," respectively, as
used in Chapter 55 of the General Statutes of North Carolina.
ARTICLE VII
Indemnity of Officers and Directors
-----------------------------------
Section 35. Indemnification and Advancement of Expenses.
-------------------------------------------
(a) The Corporation shall reimburse or indemnify any past, present or
future officer or director of the Corporation for and against such liabilities
and expenses as are authorized by Sections 55-8-54, 55-8-55, 55-8-56 and 55-8-57
of the General Statutes of North Carolina.
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Persons serving as officers or directors of the Corporation or serving in any
such capacity at the request of the Corporation in any other Corporation,
partnership, joint venture, trust or other enterprise shall be provided
reimbursement and indemnification by the Corporation to the maximum extent
allowed hereunder or under applicable law, including without limitation Sections
55-8-54, 55-8-55, 55-8-56 and 55-8-57 of the General Statutes of North Carolina.
(b) In addition to the reimbursement and indemnification provisions set
forth above, any person who at any time serves or has served (1) as an officer
or director of the Corporation, or (2) at the request of the Corporation as an
officer or director (or in any position of similar authority, by whatever title
known) of any other Corporation, partnership, joint venture, trust or other
enterprise or (3) as an individual trustee or administrator under any employee
benefit plan, shall have a right to be indemnified by the Corporation to the
fullest extent permitted by law against (i) all reasonable expenses, including
attorney's fees, actually and necessarily incurred by him in connection with any
pending, threatened or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether or not brought by the
Corporation or on behalf of the Corporation in a derivative action, seeking to
hold him liable by reason of or arising out of his status as such or his
activities in any of the foregoing capacities, and (ii) payments made by him in
satisfaction of any judgment, money decree, fine, penalty or settlement for
which he may have become liable in any such action, suit or proceeding;
provided, however, that the Corporation shall not indemnify any person against
liability or litigation expense he may incur on account of his activities which
were at the time taken known or believed by him to be clearly in conflict with
the best interests of the Corporation.
(c) No past, present or future director or officer of the Corporation
(or his heirs, executors, and administrators) shall be liable for any act,
omission, step or conduct taken or had in good faith that (whether by condition
or otherwise) is required, authorized or approved by any order or orders issued
pursuant to: the Public Utility Holding Company Act of 1935; the Federal Power
Act; or any state statute regulating the Corporation or its subsidiaries by
reason of their being public utility companies or subsidiaries of public utility
holding companies; or any amendments to the foregoing laws. If this provision is
found by a court not to constitute a valid defense to any claim against such
director or officer, each director and officer (and his heirs, executors and
administrators) shall be reimbursed for, or indemnified against, all expenses
and liabilities received by him in connection with, or arising from, any such
action, suit or proceeding based on any act, omission, step or conduct described
above. Such expenses and liabilities include, but are not limited to, judgments,
court costs and attorneys' fees. The foregoing rights shall not be exclusive of
other rights to which any director or officer may otherwise be entitled and
shall be available whether or not the director or officer continues to be a
director or officer at the time of incurring such expenses and liabilities.
(d) The Board of Directors shall take all actions as may be necessary
or appropriate to authorize the Corporation to pay all amounts required under
this Section 35 of the By-Laws including, without limitation and to the extent
deemed to be appropriate, necessary, or required by law (1) making a good faith
evaluation of the manner in which the claimant for indemnity acted and of the
reasonable amount of indemnity due such individual, or (2) making advances of
costs and expenses, or (3) giving notice to, or obtaining approval by, the
shareholders of the Corporation.
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(e) Any person who serves or has served in any of the aforesaid
capacities for or on behalf of the Corporation shall be deemed to be doing or
have done so in reliance upon, and as consideration for, the rights of
reimbursement and indemnification provided for herein. Such rights of
reimbursement and indemnification shall inure to the benefit of the legal
representatives of such individuals, shall include amounts paid in settlement
and shall not be exclusive of any other rights to which such individuals shall
be entitled apart from the provisions of this Section. No amendment to or repeal
of any provision of this Section 35 shall impair any right of a director or
officer based on service in such capacity up to the effective time of such
amendment or repeal.
(f) The Corporation may, in its sole discretion, wholly or partially
indemnify and advance expenses to any employee or agent of the Corporation to
the same extent as provided herein for officers and directors.
(g) The provisions of this Section shall not limit the power of the
Corporation to agree to indemnify its directors, officers, employees or agents,
by contract or resolution to the fullest extent allowed by applicable law.
ARTICLE VIII
Emergency By-Laws
-----------------
Section 36. Definitions.
-----------
As used in these Emergency By-Laws.
(a) the term "period of emergency" shall mean any period during which a
quorum of the Board cannot readily be assembled because of some catastrophic
event.
(b) the term "incapacitated" shall mean that the individual to whom
such term is applied shall not have been determined to be dead but shall be
missing or unable to discharge the responsibilities of his office; and
(c) the term "senior officer" shall mean the Chairman of the Board, the
Chief Executive Officer, the President, any Senior Executive Vice President,
Executive Vice President, Senior Vice President or Vice President, the
Treasurer, the Controller and the Secretary, and any other person who may have
been so designated by the Board before the emergency.
Section 37. Applicability.
-------------
These Emergency By-Laws, as from time to time amended, shall be
operative only during any period of emergency. To the extent not inconsistent
with these Emergency By-Laws, all provisions of the regular By-Laws of the
Corporation shall remain in effect during any period of emergency.
No officer, director or employee shall be liable for actions taken in
good faith in accordance with these Emergency By-Laws.
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Section 38. Board of Directors.
------------------
(a) A meeting of the Board may be called by any director or senior
officer of the Corporation. Notice of any meeting of the Board need be given
only to such of the directors as it may be feasible to reach at the time and by
such means as may be feasible at the time, including publication or radio, and
at a time less than twenty-four hours before the meeting if deemed necessary by
the person giving notice.
(b) At any meeting of the Board, three directors in attendance shall
constitute a quorum. Any act of a majority of the directors present at a meeting
at which a quorum shall be present shall be the act of the Board. If less than
three directors should be present at a meeting of the Board, any senior officer
of the Corporation in attendance at such meeting shall serve as a director for
such meeting, selected in order of rank and within the same rank in order of
seniority.
(c) In addition to the Board's powers under the regular By-Laws of the
Corporation to fill vacancies on the Board, the Board may elect any individual
as a director to replace any director who may be incapacitated and to serve
until the latter ceases to be incapacitated or until the termination of the
period of emergency, whichever first occurs. In considering officers of the
Corporation for election to the Board, the rank and seniority of individual
officers shall not be pertinent.
(d) The Board, during as well as before any such emergency, may change
the principal office or designate several alternative offices or authorize the
officers to do so.
Section 39. Appointment of Officers.
-----------------------
In addition to the Board's powers under the regular By-Laws of the
Corporation with respect to the election of officers, the Board may elect any
individual as an officer to replace any officer who may be incapacitated and to
serve until the latter ceases to be incapacitated.
Section 40. Amendments.
----------
These Emergency By-Laws shall be subject to repeal or change by further
action of the Board of Directors or by action of the shareholders, except that
no such repeal or change shall modify the provisions of the second paragraph of
Section 37 with regard to action or inaction prior to the time of such repeal or
change. Any such amendment of these Emergency By-Laws may make any further or
different provision that may be practical and necessary for the circumstances of
the emergency.
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